Low pay at a startup Hedge Fund. Any advice?
Thanks for all the advice. Duly noted and I am now summarizing this thread.
In summary, I am significantly (>50%) underpaid at a small 100 Million USD startup hedge fund given my experience and education. I have been working there as an equity analyst for 5 years. I was thinking what to do, how to best position myself to change jobs, and whether to get an MBA to reset my career.
The consensus seems to be that I should just keep trying to move to another fund, and I should build a paper portfolio to prove my claims on performance regarding my stock pitches.
"ironnchef" Paper trade that portfolio...track every trade..entry and exit price. I suggest using TraderVue.com and collective2.com (the free version of tradervue is probably fine...probably need to use the "basic" version of collective2) This will keep you honest (only trade on actual live prices....no looking back), and will also lend credibility to your claims...and allow potential investors / employers to see your actual track record and performance.
Hope the summary will help future readers. Any further advice would be appreciated!
need more info...
1) what is the firms AUM in USD, and last few years annual performance 2) what is your actual role? do you analyze stocks and then suggest trades...or do you just research whatever is asked of you and then the PM creates his own trade recommendations?
If you have been suggesting trades, have you kept a blotter of your trade recs (with prices) to track your own performance?
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ok, so you seem to not understand what you should have been doing regarding your own performance.
imagine you were a solo PM....every "idea" you have becomes an actual trade and position in your "fund"....with an entry price + reason "why now", position size, and potentially an exit price.
Nevermind how your PM manages his book...how would you manage YOUR book if you were 100% in charge?
Going forward, starting today, construct a portfolio "asif" you were running your own fund. Decide if you want to be fully invested right now, or if you want to keep some AUM in cash or Tbills while you wait for better entry prices. Assume whatever your starting AUM is, you don't get any more...so if you are "fully invested" then you will need to sell something to make room for the new positions. aka...take this seriously.
Paper trade that portfolio...track every trade..entry and exit price. I suggest using TraderVue.com and collective2.com (the free version of tradervue is probably fine...probably need to use the "basic" version of collective2) This will keep you honest (only trade on actual live prices....no looking back), and will also lend credibility to your claims...and allow potential investors / employers to see your actual track record and performance.
You should have been doing this for the past 5 years, and you deserve some punishment for not doing this. Since you have not, better start ASAP.
You might be able to get a job as a junior analyst at another fund if you can articulate a repeatable strategy, but the current environment is not ideal...there are fewer spots available than normal, so you might need to wait 1-2 years before you actually get a chance to jump ship. Remember, you are competing against many other people who want the same job, so you need to be able to articulate "why you".
Why is your hit rate so low on pitches?
After 5 years your fund is no longer a start-up, it's a failure if it can only pay you that little. If the fund had performed well, it would have attracted AUM by now. Get out, now. Keep trying to move. Unless you are covering microcaps and such, fund AUM that you come from doesnt matter much.. what matters is the work you've been doing.
Agree that more info is needed to weigh in with any real confidence. I can provide some data points on what joining early stage NYC hedge funds looks like for someone in the 5yr high quality/relevant work experience. Generally, offers tend to look something along the lines of:
125-200k Salary 4-10 Points (% of Firm Incentive Fees)
Those two can vary based on size of each other, candidate quality, structure of firm, capital commitments already in place, et al.. The general idea is that very early employees at a firm with material business continuity risk get paid in upside for taking on some of that business continuity risk.
Yeah after 4 years this is terrible. Sounds like you have some good data points even if the fund name won't mean anything to people. Couldn't really tell you what you are actually worth but you should be actively looking for something else.
Yes, you are being ridiculously underpaid. Switch asap
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